At the time of making the payment, the person making the payment shall deduct TDS as per the following TDS Rate Chart.
| Section No. | Payment for the purpose of | TDS not required to be compulsarily deducted if payment expected to be made during the year is less than | TDS Rate for Payment to | |
| Individual/ HUF | Others | |||
| 192 | Salary | Minimum amount not chargeable to Tax | As per the Slab Rates | |
| 193 | Interest on Securities/ Debentures | 5000 | 10% | 10% |
| 194 | Deemed Dividend | – | 10% | 10% |
| 194A | Interest other than securities
– Others |
10000
5000 |
10%
10% |
10%
10% |
| 194B | Winning from Lotteries/Game/Puzzle | 10000 | 30% | 30% |
| 194BB | Winning from Horse Race | 10000 | 30% | 30% |
| 194C | Payment to Contractors
– Single Transaction – Aggregate during the Year – Transporter who has provided PAN |
30000
100000 Nil |
1%
1% Nil |
2%
2% Nil |
| 194D | Insurance Commission
(Rates reduced from 10% to 5% from FY 2016-17) |
15000 | 5% | 5% |
| 194E | Non-Resident Sportsmen | – | 20% | 20% |
| 194EE | Payment out of deposits under NSS | 2500 | 10% | |
| 194G | Commission – Lottery
(Rates reduced from 10% to 5% from FY 2016-17) |
15000 | 5% | 5% |
| 194H | Commission – Brokerage
(Rates reduced from 10% to 5% from FY 2016-17) |
15000 | 5% | 5% |
| 194I | Rent
– Land & Building – Plant & Machinery |
180000
180000 |
10%
2% |
10%
2% |
| 194J | Professional Fees | 30000 | 10% | 10% |
| 194IA | Immovable Property (wef 1st June 13) | 5000000 | 1% | 1% |
Notes regarding TDS Rate Chart
- In case the PAN No. is not furnished, the TDS Rate should be deducted @ 20% under Section 206AA
- In all the above cases, TDS Certificate in Form 16A is to be issued by the person deducting the Tax. However, in case of TDS on Salary, Form 16 is to be issued.
- No Surcharge or Education Cess is levied on the above stated TDS Rates in case payment is made to Resident Individuals. Only in case of Salaries, TDS should be deducted taking Surcharge & Education Cess into account and in all the rest of the cases, surcharge should be ignored for the purpose of TDS.
- In case of Non-Residents, Surcharge and Education Cess on TDS would be applicable
- All assessees except Individual & HUF are mandatorily required to deduct TDS at the time of making any payment for the above stated reasons. However, Individuals & HUF would also be required to deduct TDS if they are liable to tax audit. (Recommended Read: What is Tax Audit)
- The person deducting the TDS is also required to apply for a TAN No (Recommended Read: What is TAN No.)
- The TDS deducted shall be deposited with the Income Tax Dept before the due date of deposit of TDS (Recommended Read: Due Date for deposit of TDS)
- TDS Return is also required to be submitted quarterly stating the TDS deducted and deposited. (Recommended Read: Due Date for filing TDS Return)
- In case an assessee submits a certificate for nil/lower deduction of TDS, the tds should be deducted according to the rates specified in the certificate and not as per the above TDS Rate Chart.
- TDS is to be deducted on the amount inclusive of Service Tax in all cases except Rent (Recommended Read: TDS on Service Tax)
- Just like TDS is deducted by the buyer, in some cases tax is also collected by the seller (Recommended Read: Tax Collected at Source)
